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CongressNow Overview: Seniors Have a Lot at Stake in Health Debate

A lot is on the line for seniors in the current health care debate.

President Barack Obama and Congressional leaders are making the programs that seniors rely on — Medicare and Medicaid — a focal point for their attempts to reform the nation’s health care system, as efforts to expand coverage and ensure the long-term viability of these programs comes front and center.

The challenge of providing medical care to seniors is growing as the number of elderly continues to increase. With baby boomers continuing to age, there is a “demographic crisis,” a health care lobbyist said, as 78 million people will be ready for retirement by 2030.

Seniors “have a tremendous stake in the success of health care reform,” said former Rep. Barbara Kennelly (D-Conn.), president and CEO of the National Committee to Preserve Social Security and Medicare.

Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging, said bold action is necessary.

“There is no turning back, and the status quo cannot continue,” he said.

As part of health reform, Members of Congress are focusing on reducing the “doughnut hole” — the gap in coverage for seniors under the prescription drug benefit.

The White House and Senate Finance Chairman Max Baucus (D-Mont.) reached a tentative agreement with pharmaceutical companies recently for those companies to provide a 50 percent discount in the cost of brand drugs. At the time, Obama called the deal “a significant breakthrough on the road to health care reform.”

But the White House is facing resistance from House Democrats, who complain they were not involved in these negotiations.

Instead, House Energy and Commerce Chairman Henry Waxman (D-Calif.) plans to fill in the doughnut hole by forcing companies to accept lower payments for prescription drugs for poor elderly patients that are eligible for both Medicare and Medicaid, as they did before the Medicare drug law took effect.

“We are just asking pharmaceutical companies to pay us back for the windfall” of including dual-eligible citizens under the government prescription drug plan, Waxman said last month. Waxman estimated that pharmaceutical companies have earned billions of dollars more by transferring dual-eligibles from Medicaid, where they received significant discounts on drugs, to Medicare, where they paid substantially higher rates.

Congress is also considering revising the formula to reimburse doctors for Medicare services in an effort to preserve access to these services. Doctors stand to face a 21 percent cut in their reimbursements in 2010, and many experts worry that such cuts will lead fewer physicians to provide care for elderly Medicare patients.

Obama promised physicians, during a speech earlier this year before the American Medical Association, that the formula would change to their advantage.

“We will ensure that you are being reimbursed in a thoughtful way that’s tied to patient outcomes, instead of relying on yearly negotiations about the sustainable growth rate formula that’s based on politics and the immediate state of the federal budget in any given year,” Obama said.

Mohammad Akhter, executive director of the National Medical Association, which represents minority physicians, argues that fixing these cuts will keep physicians from dropping Medicare patients.

House Democrats are planning to set a new baseline for these Medicare payments. Not only do they hope this will help ensure wider access for health care services, but that doing so will help nail down a deal with the medical community on a government-sponsored health insurance plan.

But Republicans are concerned about how to pay for the Medicare fix. Setting a new baseline is expected to cost up to $300 billion over the next 10 years.

On the Medicaid front, lawmakers are working to expand coverage by providing an option for seniors to buy long-term care insurance. Almost 200 million Americans need long-term care, including seniors and the disabled.

Sen. Russ Feingold (D-Wis.) told CongressNow that long-term care is essential to broader health reform.

“Long-term care reform is inseparable from overall health care reform,” he said. “Reforming our long-term care system is one of the most powerful ways we can address entitlement solvency and get health care costs under control.”

Faith-based groups, such as the United Jewish Communities, which are responsible for care of a large percentage of the elderly population, are the driving force behind the push for long-term care reform.

The Senate Health, Education, Labor and Pensions Committee recently agreed to the Community Living Assistance Services and Supports Act, sponsored by HELP Chairman Edward Kennedy (D-Mass.), which establishes a voluntary disability insurance program.

But many Senate Republicans, including HELP ranking member Mike Enzi (Wyo.), Budget ranking member Judd Gregg (N.H.) and Sen. Orrin Hatch (Utah), are challenging the price of the bill, alleging that it will cost the federal government $2 trillion over the next few decades.

This bill will mean greater financial burdens on states, as they are likely pressed into service to fill any funding gaps, the Republicans argued.

“Only in Washington could someone propose a policy that costs taxpayers $2 trillion and call it a savings,” Enzi said earlier this month.

The American Council of Life Insurers, which provides long-term insurance, is also raising concerns. ACLI President and CEO Frank Keating sent a July 10 letter to HELP leadership warning that the program does not do enough to fully cover the costs of long-term care.

Meanwhile, the Finance Committee will soon consider its own long-term care legislation. Its bill, the Empowered at Home Act, would use grants and tax credits to expand access to home- and community-based Medicaid services.

The bill’s sponsors, Sens. John Kerry (D-Mass.) and Chuck Grassley (R-Iowa), argue that the legislation is necessary because of the difficulty that seniors have in getting home- and community-based services. Currently, more than 280,000 Medicaid beneficiaries are on waiting lists for these services.

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